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EDITOR
Elizabeth Corner
MANAGING EDITOR
James Little
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Stephanie Roker
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Rod Hardy
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Chris Lethbridge
ADVERTISEMENT SALES EXECUTIVE
Will Pownall
PRODUCTION
Stephen North
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Callum O’Reilly
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PUBLISHER
Nigel Hardy
UPDATE ON NIGERIA
A
s I write, two out of four Nigerian
National Petroleum Corporation
(NNPC) refineries in Nigeria have
been shut down, following
bombing attacks on pipelines in mid January.
The pipeline sabotage happened in the Niger
Delta, in the south of the country, and is
costing US$2.4 million/d in lost gas and
electricity. The refineries, situated in the
southern city of Port Harcourt and the
northern city of Kaduna, have been forced to
close due to lack of crude supply. Pipeline
attacks are nothing new in Nigeria, but these
latest attacks mark a massive shift in security
of supply.
A 2009 amnesty
dramatically reduced a
long spate of attacks on
oil infrastructure in the
Delta (not to mention
kidnappings). Brokered
by President Umaru
Yar’Adua, the terms of
the amnesty granted
some 30 000
ex-militants monthly
subsidies of 65 000 naira
(US$326) and offered job employment and
training opportunities.
Nigeria has a new President, Muhammadu
Buhair, who came to power in March 2015,
beating incumbent President Goodluck
Jonathan. The new President has been quoted
as saying he will end the amnesty programme
(although it will run for at least another year,
as planned). His stance on militants is much
tougher than the previous administration.
Since appointing himself Minister of
Petroleum last November, Buhair has ordered
that the military take over protection of oil
pipelines in the nation, which has had the
effect of taking security contracts from
ex-militants. The Director of Defence
Information has promised that the military will
be deploying high-tech security networks to
protect pipeline assets from vandals.
The pipeline attacks came after the
Nigerian court issued an arrest warrant for
Government Ekpemupolo (know locally as
Tompolo), who once played a prominent part
in the Movement for the Emancipation of the
Niger Delta (MEND). The court charges him
with theft and money laundering totalling
hundreds of millions of dollars.
Commentators have suggested that the
attacks on pipelines were retaliation against
this call for arrest and a warning against further
action that would disenfranchise ex-militants.
The now-apparent vulnerability of the pipeline
assets might suggest to the new President that
it is better to work with ex-militants than
against them.
MEND has denied carrying out the attacks.
In related news, the Nigeria Extractive
Industries Transparency Initiative (NEITI) has
announced that it is intensifying efforts to
push for accurate metering facilities at
production and
export terminals in
Nigeria. The
organisation claims
that the royalties
paid to IOCs are
based on inaccurate
flow computations
and that their
moves to increase
transparency in the
process have been
met with resistance
from the purchasing oil companies.
Acting Secretary of NEITI Ogbonnaya Orji
is keen to erase irregularities in the way crude
is measured at payment point and states that
the country has until the end of February to
submit a completed NEITI audit report.
Elsewhere, Royal Dutch Shell has been
criticised for taking advantage of a huge tax
break in Nigeria, after details emerged that it
received billions of dollars in concessions
between 2004 and 2012. This was on top of
the standard five year tax advantage that all
companies enjoy when they commence
trading in Nigeria.
An ActionAid report claims that a
consortium comprising Shell, Total and Eni
received total benefits of US$3.3 billion, with
Shell pocketing a US$1.7 billion share of the tax
break. Shell and the Nigeria NLG consortium
broke no laws, but many have suggested that
the taxes could have been used to fund critical
services in Nigeria.
There is a silver lining for Nigeria at the
moment. The country is benefiting from the
decline in oil prices: the low price of crude
means that petrol subsidies are no longer in
place, meaning a saving of US$5 billion.
BUHAIR HAS
ORDERED THAT
THE MILITARY
TAKE OVER
PROTECTION
OF OIL
PIPELINES
